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On Sunday Switzerland Will Vote On A Package Of EU Agreements

Ulrika Lomas, Tax-news.com, Brussels

17 May 2000

On Sunday, the Swiss will vote in a nation-wide referendum on a major package of 'bilateral accords' with the EU which have been hammered out in a series of complex negotiations in the eight years since the country rejected membership of the European Economic Area (EEA) in 1992.

The EEA is, or was, a kind of waiting-room for EU membership, and the Swiss Government has long believed that EU membership is eventually a desirable goal for the country, although the population as a whole does not share that belief. Opinion polls regularly produce majorities against a renewed application for EEA or EU membership. However, if polls are to be believed, the current package, the 'bilaterals' as they are known locally, should go through, if only narrowly. Until earlier this year, there was a substantial majority in favour of the bilaterals, but the EU's ostracising of Austria over the Heidar affair has been seen as domineering, and for many people has dented generally warm feelings towards the EU.

Switzerland's problem, physically and financially surrounded as it is by EU countries, is that it cannot do without the EU: 80% of its imports come from the EU, and 60% of its exports go there; it is criss-crossed by EU trading routes which go over, through or under it; its currency has grown increasingly closer to the euro; and interest rates run parallel to those dictated by Frankfurt.

Knowing this, the Swiss government opened 16 dossiers with Brussels after the 1992 debacle, hoping to achieve the greater part of the benefits of EEA membership by stealth, so to speak. But of the 16 dossiers, equivalent to the 'chapters' of the enlargement process, only 7 have made it through to the referendum. These deal with transport, immigration (both key features of Switzerland's relationship with the EU) and a number of aspects of the single market, including financial harmonisation.

While the process of absorption of Switzerland into the EU is probably ineluctable, on a long-term view, there is no immediate sign of any pressing economic problem which could force Switzerland's hand. On the contrary: Switzerland is growing very healthily, has nearly zero unemployment, and runs a massive financial surplus with the outside world. Sunday's vote will probably be a yes, but it may be a while before the next step is taken towards the EU.

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